MARKET CLOSE: NZ stocks reach 6-month high

MARKET CLOSE: NZ stocks rise to six month high, led by SkyCity

By Jason Krupp

Oct. 29 (BusinessDesk) – New Zealand stocks rose to their highest level since April 24, outperforming regional markets, as SkyCity Entertainment Group gained after a bullish outlook statement from the company’s board.

The NZX 50 Index rose 14.89 points, or 0.5%, to 3,304.89. Within the index, 28 stocks rose, 12 fell and 10 were unchanged. Turnover was $138.7 million, on a day where most Asia Pacific markets traded in the red.

SkyCity, the country’s biggest casino operator, rose 4.1% to $3.02, after saying it is targeting profit of at least $127.4 million in the 2011 financial year as earnings got off to a solid start in the first quarter.

The Auckland-based company’s normalised net profit rose 3.7% in the three months ended Sept. 30 from a year earlier, it said, without giving the value of earnings.

“SkyCity’s directors were pretty upbeat on their outlook and people have been buying on sentiment alone,” said Karl Williscroft, a trader with Direct Broking. “Quite often it’s not the early results that reveal a whole lot about the company, but the forward looking statement, and SkyCity is looking pretty positive.”

Michael Hill International Ltd., the jewellery manufacturer and retailer, rose 3.9% to 81 cents, its highest level since September 2008. Williscroft said investors were interested in the company’s second push into the U.S. having revised its strategy after its initial foray resulted in several stores being closed.

ANZ National Bank said it had received offers for the management contracts for Vital Healthcare Property Trust and Argosy Property Management, its exchange-traded investment units.

Vital and Argosy made separate, identical statements to the NZX about the expressions of interest, giving no details. Shares in Vital rose 0.8% to $1.35, and Argosy was unchanged at 78 cents.

Fletcher Building Ltd., New Zealand’s biggest construction company, rose 0.1% to $8.22 after government data on building consents showed the value for non-residential building consents was $365 million in September, up 42% compared with the same month last year.

Tower Ltd., the general insurer controlled by Guinness Peat Group, rose 0.5% to $1.87 after the company said it may still be interested in Fidelity Life despite letting its $118 million offer for the life insurer lapse.

AMP NZ Office Trust, which last week convinced investors to approve a restructure of the property investor into a company, was unchanged at 78 cents after it reported a 56% decline in first quarter earnings after paper losses and falling rental revenues weighed on earnings.

Net profit sank to $6.5 million in the three months ended Sept. 30 from $14.7 million in the same period last year, most of which came from paper losses on the fair value of ANZO’s interest rate swaps and deferred tax, which the company was forced to recognise under New Zealand’s accounting rules.

Net operating profit after tax, the favoured measure for property investors, fell 5.8% to $15.1 million in the period. Earnings per unit dropped 5.6% to 1.52 cents per unit.

Freightways Ltd. was unchanged at $3.04, after the company yesterday posted a 4% decline in first-quarter profit, reflecting higher bank margins, and said the recovery in the domestic economy will continue at a tepid pace.

The operator of courier firms including New Zealand Couriers, Post Haste, SUB60 and Kiwi Express said net income declined to $6.7 million in the three months ended Sept. 30 from $7 million a year earlier. Sales climbed 4% to $85.4 million.

Steel & Tube Holdings, the company that manufactures steel products for the construction industry, fell 2% to $2.44, p-acing decliners on the NZX50. PGG Wrightson Ltd., the rural services company, fell 1.8% to 54 cents, and outdoor clothing retailer, Kathmandu Holdings, fell 1.7% to $1.71.

New Zealand Oil & Gas Ltd, the energy exploration and production company, fell 0.8% to $1.27 after it said it is already anticipating further delays to projected coal production by Pike River Coal Ltd. because of the likelihood that the troubled West Coast miner will breach debt covenants again before reaching full production.

However, an appraisal report prepared ahead of a special meeting of Pike shareholders on Nov. 15 says “the Independent Directors of Pike River do not consider that any further extension would be warranted for at least the next six months.”

Shares in Pike were unchanged at $1.04.

(BusinessDesk)

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